The '74' new car plate beckons

From 1 September 2024, the number ‘74’ will start appearing on all new vehicles hitting our roads. As is always the case, this is the second of the two new car sales peaks in the year, and it will be a crucial period for car dealers and manufacturers, but perhaps this year, it will have an additional dimension. 

The added dimension is the Zero Emission Vehicle (ZEV) mandate, which requires manufacturers to ensure that 22% of their new cars sold this year are zero emission. It's proving to be a challenging target. 

At the end of July, the Society of Motor Manufacturers and Traders (SMMT) shared the following year to date summary of new car sales activity: 

• The UK's new car market rose 2.5% in July, achieving 24 consecutive months of growth. 
• Battery Electric Vehicle (BEV) sales outpaced the overall July market, rising to 18.8%, but only 16.8% of the new car market in the year to the end of July, well behind the mandated 22% transition target. 

At the time, the SMMT forecasted that 2024 would see 1.968m new car registrations by the end of the year, but BEV sales would only achieve 18.5% of the new car market. This was down from a previous forecast of 19.8%. 

The outlook for BEV sales suggests that they are likely to be on an upward trajectory, but they need to be faster to achieve the 22% target. The falling private buyer share of the BEV market, despite the generous incentives from several manufacturers, will be especially concerning. 

While manufacturers can receive some exemptions for selling other types of cars and can also borrow credits from other manufacturers if they are struggling to hit their respective ZEV targets, their options to avoid fines appear to be to;  

• Offer further customer incentives, which are likely to be seen in the coming months. 
• Rein in new petrol/diesel sales. 
• Pre-register BEVs. 
• Lobby the government to offer some flexibility. 

A combination seems likely, with the government lobbying approach, which is being seen across Europe, being a potentially powerful tool. For example, Stellantis claimed in June that it could close British factories if the UK government did not loosen sales regulations. 

What is clear is that the BEV trajectory will continue upwards, but perhaps, at least in the short term, at a slightly slower rate. September’s new car registrations could be telling.